Inquiries and reviews

21013 precautionary recall

Fonterra reviews

CEO Operational Review

At Fonterra, we are committed to providing high quality dairy ingredients and products to our customers and to people around the world.

Having finalised the precautionary recall, our priority was finding out why this happened, prevent it from happening again, and ensure we take all steps necessary to maintain our global leadership position within the dairy industry.

Our initial investigations gave us a clear idea of the events that led to the recall, then we established a detailed understanding of the processes, systems and decisions involved.

Fonterra’s Group Director of Strategy, Maury Leyland, lead an in-depth review covering our business processes, information and traceability systems, and current ways of working, including decision-making processes.

On 12 August 2013, Fonterra Chairman John Wilson announced that the Board of Directors of Fonterra had established the WPC80 Inquiry Committee, and charged them to oversee an independent review into the circumstances giving rise to the affected whey protein concentrate (WPC80) and subsequent chain of events.

The Committee was be chaired by Independent Fonterra Director, Sir Ralph Norris, and included two external independent members who are not Fonterra Board members.

The Committee is comprised of:

Sir Ralph Norris (chair) – Independent Director

Simon Israel – Independent Director

Dame Judith Potter – External Independent Member

Blue Read – Farmer Elected Director

Nicola Shadbolt – Farmer Elected Director

John Waller – Independent Director

Professor Stuart McCutcheon, Vice Chancellor of the University of Auckland

The Committee appointed Jack Hodder, QC of Chapman Tripp, to undertake the review, reporting back to the Committee. The inquiry team also included an international food safety expert, Jacob Heida, and a specialist in crisis management and communication, Gabrielle Trainor.

New Zealand Government inquiries

On August 19 Primary Industries Minister Nathan Guy and Food Safety Minister Nikki Kaye released the draft terms of inquiry for the Government’s investigation into the whey protein concentrate contamination (WPC) incident.

The Government has agreed in principle to establish a joint Ministerial-led Government Inquiry which will be divided into two parts:

Part A will look at how the potentially contaminated whey protein concentrate entered the New Zealand and international market, and how this was subsequently addressed.

Parts B and C will look at regulatory and best practice requirements against the background of this incident in relation to the dairy industry, including the response of regulators.

The inquiry will then report back on any recommended legal, regulatory or operational changes

The Ministers have invited Miriam Dean QC to chair the inquiry. Ms Dean is the past president of the Bar Association, a former partner at Russell McVeagh, and has held a range of board appointments. Two other members will also be appointed shortly, one of whom will be an international food safety expert.

The details of the Ministerial inquiry, including the appointment process, are ‘in principle’ because it’s proposed that the inquiry will be carried out using powers in the Inquiries Bill currently before the House.

The Ministry for Primary Industries (MPI) has commenced a compliance investigation into the potential contamination of three batches of Fonterra’s whey protein concentrate.

This compliance investigation will determine whether regulatory requirements under the Food Act and the Animal Products Act were met by all parties involved, or whether any parties may have committed any breaches or offences.